| Baluchistan Wheels Limited |
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| Annual
Report 1999 |
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| CONTENTS |
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| Corporate
Information |
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| Notice
of Meeting |
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| Chairman's
Review |
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| Directors'
Report to the Shareholders |
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| Auditors'
Report to the Members |
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| Balance Sheet |
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| Profit
and Loss Account |
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| Statement
of Changes in Financial Position |
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| Notes
to the Accounts |
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| Five-Years
at a Glance |
|
| Pattern
of Shareholdings |
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| CORPORATE
INFORMATION |
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| BOARD
OF DIRECTORS |
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|
| Mr.
Muhammad Siddique Memon |
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| Chairman |
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| Mr.
Razak Haji Mohammed Bengali |
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| Chief Executive |
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| Mr.
Muhammed Irfan Ghani |
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| Chief
Operating Officer |
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| Mr.
Sikandar Mustafa Khan |
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| Mr. Nasim Beg |
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| Mr.
J.M. Pereira |
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| Mr.
Mohammed Khalid Ali |
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| Company
Secretary |
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| Mr.
Irfan Ahmed Qureshi |
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| AUDITORS |
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| Sidat
Hyder Qamar & Co. |
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|
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| (Chartered
Accountants) |
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| LEGAL
ADVISOR |
|
| Mohsin
Tayebaly & Company |
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| BANKERS |
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| Habib
Bank Limited |
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| Union
Bank Limited |
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| Bank of Khyber |
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| Gulf
Commercial Bank Ltd |
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| National
Bank of Pakistan |
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| SHARES
DEPARTMENT & |
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| HEAD OFFICE |
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| 1st
floor, State Life Building # 3, |
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| Dr.
Ziauddin Ahmed Road, Karachi. |
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| E-mail:
bwheels@khi.compol.com |
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| Internet:http.//www.comp-link.com/bwheels. |
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| Telephone
# 5689259, 5683474, 5687502 |
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| Fax # 5684003 |
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| FACTORY & |
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| REGISTERED
OFFICE |
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| Main
RCD Highway, Hub Chowki, |
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| Lasbella,
Baluchistan. |
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| Telephone
# (0202) 32496, 32497, 32498 |
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| Fax:
# (0202) 33035 |
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| NOTICE
OF THE MEETING |
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| NOTICE
IS HEREBY GIVEN that the NINETEENTH Annual General Meeting of the Company
will be held at the |
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| Company's
Registered Office, Main RCD Highway, Hub Chowki, District Lasbella,
Baluchistan, on Saturday, November |
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| 27,
1999 at 09:30 a.m. to transact the following business:- |
|
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| 1.
To confirm minutes of the 18th Annual General Meeting held on December 12,
1998. |
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|
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| 2.
To receive, consider and adopt the Audited Accounts for the year ended June
30, 1999 together with the |
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| Directors'
and Auditors' Reports thereon. |
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|
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| 3.
To approve dividend (Directors have recommended Final dividend @ 15% in
addition to interim dividend already |
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| paid
@ 15% thus making the total dividend of 30% for the year ended June 30,
1999.) |
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|
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| 4.
To appoint Auditors for the year ending June 30, 2000 and to fix their
remuneration. |
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| Special
Business |
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| 5.
To consider, ratify and approve the remuneration of the Chairman, Chief
Executive and full time working Director. |
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| 6.
Any other Business with the permission of the Chair. |
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BY ORDER OF THE BOARD |
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|
IRFAN AHMED QURESHI |
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| Karachi:
November 05, 1999 |
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|
Company Secretary |
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| Statement
Under Section 160 (I) (B) of the Companies Ordinance, 1984 |
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| pertaining
to the special business is annexed to this notice. |
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| NOTES: |
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| 1.
A member entitled to attend and vote at this meeting may appoint another
member as his/her Proxy to attend |
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| the
meeting and vote instead of him/her. Proxies in order to be effective must be
received by the Company not |
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| less
than 48 hours before the meeting. (Proxy Form is enclosed herewith.). |
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| 2.
Shareholders are advised to immediately notify of any change in their
addresses to our Shares Department, 1st |
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| Floor,
State Life Building No. 3, Dr. Ziauddin Ahmed Road, Karachi. |
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| 3.
Transport will be provided to members from the Karachi Stock Exchange
Building to attend the meeting. Departure |
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| from
Stock Exchange Building will be at 08:30 a.m. |
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| STATEMENT
UNDER SECTION 160 (I) (B) OF THE COMPANIES ORDINANCE, 1984 |
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| Approval
of remuneration of the Chairman, Chief Executive and full time working
Director of the Company. |
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| The
approval of nominal increase in remuneration alongwith other benefits as per
the services rules paid to Chairman, |
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| Chief
Executive and the full time working Director as per recommendations of the
Board of Directors of the Company. |
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| For
this purpose it is proposed that the following resolution be passed as an
ordinary resolution. |
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| RESOLVED
that an annual aggregating sum not exceeding Rs. 6,459,000/- be and is hereby
authorized for payment |
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| towards
remuneration alongwith other benefits as per the services rules to Chairman,
Chief Executive and the full time |
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| working
Director M/s. Muhammad Siddique Memon, Razak H.M. Bengali, and Muhammad Irfan
Ghani respectively. |
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|
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| CHAIRMAN'S
REVIEW |
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| The
year under review experienced good business conditions for your company
mainly due to the increase in demand |
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| of
tractors in order to implement special tractor scheme. |
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| Your
company fully responded accordingly. It manufactured and supplied tractor
wheels to the local assembly units |
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| according
to their requirements and sold 120,572 tractor wheels as against 51,000 of
previous year, which is 136% |
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| higher
than the last year. |
|
|
| In
the auto sector we sold 151,046 wheels as against 159,000 of previous year
which is 5% less than the last year. The |
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| decline
in automobile sector wheels is due to the sluggish market conditions because
of the uncertainty prevailing in the |
|
| market. |
|
|
| Overall
your company sold 27 I, 618 wheels as against 210,000 of previous year which
is 29% higher than the last year. |
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|
| OPERATING
RESULTS: |
|
| The
sale during the year was Rs, 339 million as compared to Rs. 187 million last
year which is 81% higher than the last |
|
| year.
This year your company had a record pre-tax profit of Rs.61 million as
against Rs. 32 million last year which is 9 I% |
|
| higher
than the last year. The profit after taxation is Rs. 41.9 million as compared
to Rs. 23.9 million for the last year |
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| which
is 75% higher than the last year, mainly due to increase in sales volume and
exercise of tight control on the |
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| production,
selling, administrative expenses and the wastages. After protracted
discussions with original |
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| equipment
manufactures (OEMs) your company was able to get price increase in the prices
of wheels for tractors as |
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| well
as for automobiles, but the increase was marginal and despite the increase
there was decline in gross profit by |
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| 1.65%
as there were also increase in various components of cost of sales due to the
factors beyond our control and |
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| in
respect of which we have been highlighting to OEMs. |
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|
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| We
are happy that we have achieved the targets set, and are in the better shape
than we were, but there is still a lot |
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| more to be done. |
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| We
provide to our customers with quality products so as to create lasting
customer relationship, provide growth and |
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| opportunities
for our employees and generate stable returns to our stakeholders. We will
achieve these goals through |
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| organisation
vide commitment to quality, professional management, sound business practices
and team-work. |
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| FUTURE
PROSPECTS & CORPORATE PLANS: |
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| The
Government has committed funds to ADBP to ensure suitable financing
arrangements for farmers, and it is hoped |
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| that
the continuous and uninterrupted funds are provided to the farmers to meet
the green tractor scheme's targets. |
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| However,
if there is any hindrance in the smooth flow of funds, this will result in
the drop in tractor production and |
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| sales,
which will also affect your company's profitability. |
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| On
the automobile, truck and buses side, it is hoped that the economic activity
will now pick up and with its improvement |
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| your
company will also reap benefits.. |
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| Any
increase in steel prices internationally and locally (by Pakistan Steel) will
have effect on the profitability of your |
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| company. |
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| The
management is consistently improving the plant facilities. It has recently
ordered for a most modern Computerised |
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| Numeric
Control (CNC) machine which will help in producing 70% of its tools
requirement which will help in the quick |
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| and
accurate development of new wheels required by the customers and saving in
foreign exchange. For improving the |
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| quality
of products and quality checking of wheels the company is also planning to
change the painting system to (ED) |
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| Electro
Depositing system which will improve the paint quality.
: |
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| The
Directors have the pleasure in stating that the computers hardware and
software used by the company are year |
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| 2000 compliant. |
|
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| In
order to keep abreast with the ever changing cost of the Materials and other
inputs and to further exercise the |
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| control
over the cost and to improve the Management Information System, your
management is also planning to |
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| initiate
the advance costing system and cost measures for the improvement of the
company. |
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| The
Auditors' observation concerning investment with National Bank of Pakistan
(Formerly; Mehran Bank Ltd.) |
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| and
loan and interest due to Economic Affairs Division (Govt of Pakistan) have
been fully explained in Notes 20.1 |
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| and
7.3 to the accounts. |
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|
| On
April 17, 1999 M/s National Bank of Pakistan published a Public Notice
regarding pledge of shares of the Company |
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| with
the Bank. Your management clarified the same vide another Public Notice Dated
April 21, 1999 that it does |
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| not
recognise the persons mentioned in the said Public Notice of April 17, 1999. |
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| HUMAN
RESOURCES: |
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| The
year 1998-99 ushered in a new Union Agreement with the CBA Union for the next
2 years, and your management |
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| settled
the issues with the Union in a peaceful and cordial manner. The management at
every level recognises the skills |
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| and
talents of its employees since it believes that success in business heavily
depends on timely availability of talented |
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| and
motivated personnel. |
|
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| The
Board wish to place on record their appreciation for the devotion and
hardwork of all the staff and workers of |
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| the
company which has resulted in favourable results in challenging market
conditions and their satisfaction on the |
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| cordial
atmosphere maintained during the period. |
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| BASIC
EARNINGS PER SHARE |
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| Based
on the net profit for the current year the earning per share was Rs. 3.62
(1998: Rs. 2.06) |
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|
FOR AND ON BEHALF OF THE BOARD |
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|
MUHAMMAD SIDDIQUE MEMON |
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| Karachi:
October 04, 1999 |
|
Chairman |
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|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
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| The
Directors of your Company take pleasure in presenting their 19th ANNUAL
REPORT with Audited Accounts of the Company |
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| together
with Auditors' Report thereon for the year ended June 30, 1999. |
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|
1999 |
1998 |
|
|
|
(Rupees in
'000') |
|
|
| FINANCIAL
RESULTS |
|
| Profit
before Taxation |
|
61,535 |
32,326 |
|
| Profit
after Taxation |
|
41,980 |
23,902 |
|
| Unappropriated
Profit brought forward |
|
58 |
46 |
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
42,038 |
23,948 |
|
|
|
|
|
| Appropriations: |
|
|
|
| Interim
Dividend 15% (I 998 Nil) |
|
17,393 |
-- |
|
| Proposed
Final Dividend 15% (I 998: 20%) |
|
17,393 |
23,190 |
|
| Transfer
to General Reserve |
|
-- |
700 |
|
| Unappropriated
Profit carried forward |
|
7,252 |
58 |
|
| EARNINGS
PER SHARE |
|
Rs. 3.62 |
Rs. 2.06 |
|
|
|
| The
Board proposes payment of final Dividend of 15% in addition to interim
dividend of 15% already paid, thus making a total |
|
| Dividend
of 30% for the year under review. |
|
|
|
|
| CHAIRMAN'S
REVIEW |
|
|
| Your
Directors endorse the contents of the Chairman's Review, which deals with the
company's activities during the year, and |
|
| forms
part of the Directors' Report. |
|
|
| DIRECTORS |
|
|
|
|
| There
has been no change in the composition of the Board of Directors since the
last report. |
|
|
| AUDITORS |
|
| The
retiring Auditors Sidat Hyder Qamar & Co. being eligible, offer
themselves for reappointment. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| A
statement of the pattern of share holding of the company as on June 30, 1999
is annexed to this Annual report. |
|
|
|
|
FOR AND ON BEHALF OF THE BOARD |
|
|
|
|
|
|
|
(Razak H. M. Bengali) |
|
| Karachi:
October 04, 1999 |
|
Chief Executive |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of BALUCHISTAN
WHEELS LIMITED as at 30 June 1999 and the |
|
| related
profit and loss account and statement of changes in financial position,
together with the notes forming part |
|
| thereof,
for the year then ended and we state that we have obtained all the
information and explanations which to the |
|
| best
of our knowledge and belief were necessary for the purposes of our audit and,
after due verification thereof, we |
|
| report that: |
|
|
| a)
in our opinion, proper books of account have been kept by the Company as
required by the Companies Ordinance, |
|
| 1984; |
|
|
|
|
|
| b)
in our opinion: |
|
|
|
|
| i)
the balance sheet and profit and loss account, together with the notes
thereon, have been drawn up in |
|
| conformity
with the Companies Ordinance, 1984 and are in agreement with the books of
account and are |
|
| further
in accordance with accounting policies consistently applied; |
|
|
| ii)
the expenditure incurred during the year was for the purpose of the Company's
business; and |
|
|
|
|
| iii)
the business conducted, investments made and the expenditure incurred during
the year were in accordance |
|
| with
the objects of the Company; |
|
|
|
|
| c)
in our opinion and to the best of our information and according to the
explanations given to us, the balance |
|
| sheet,
profit and loss account and the statement of changes in financial position,
together with the notes forming |
|
| part
thereof, give the information required by the Companies Ordinance, 1984 in
the manner so required and |
|
| respectively
give a true and fair view of the state of the Company's affairs as at 30 June
1999 and of the profit |
|
| and
the changes in financial position for the year then ended; and |
|
|
| d)
in our opinion, zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 was deducted by the |
|
| Company
and deposited in the Central Zakat Fund established under Section 7 of that
Ordinance. |
|
|
| Without
qualifying our report we draw attention to note 19.1,to the accounts in
respect of Rs.50.840 million deposited |
|
| with
former Mehran Bank Limited (MBL) and note 18 in respect of Rs. 18.272 million
return accrued thereon and to |
|
| note
7.3 to the accounts. The affairs of the former MBL have been taken over by
National Bank of Pakistan and the |
|
| matters
relating to MBL are reportedly pending settlement. |
|
|
|
|
SlDAT HYDER QAMAR &, CO. |
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| KARACHI:
October 04, 1999 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 30 JUNE 1999 |
|
|
|
Note |
1999 |
1998 |
|
|
|
|
|
(Rupees in
'000') |
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
capital |
|
|
|
| 15,000,000
Ordinary shares of Rs. 10/-each |
|
|
150,000 |
150,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
3 |
115,950 |
115,950 |
|
| General reserves |
|
|
|
4 |
101,498 |
101,498 |
|
| Accumulated
profit |
|
|
|
7,252 |
58 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
224,700 |
217,506 |
|
|
|
|
|
| Deferred
income |
|
|
|
2,017 |
-- |
|
| Liabilities
against assets subject to finance lease |
|
|
12,244 |
17,442 |
|
| Long-term
deposits |
|
|
|
353 |
138 |
|
|
|
|
|
|
| Current
Liabilities |
|
|
|
|
| Overdue
portion of long-term loan - secured |
|
7 |
85,851 |
85,851 |
|
| Current
portion of liabilities against assets, subject |
|
|
|
| to finance lease |
|
5 |
9,051 |
6,880 |
|
| Creditors,
accrued and other liabilities |
|
8 |
52,154 |
28,893 |
|
| Proposed
dividend |
|
|
|
17,393 |
23,190 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
164,449 |
144,814 |
|
| Contingencies
and commitments |
|
|
9 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
403,763 |
379,900 |
|
|
|
|
========== |
========== |
|
|
|
|
| Fixed
Assets -Tangible |
|
|
|
| Operating
assets - at book value |
|
|
10 |
120,730 |
131,258 |
|
| Capital
work-in-progress |
|
|
|
-- |
561 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
120,730 |
131,819 |
|
|
|
|
|
|
| Long-term
Investments - at cost |
|
|
11 |
450 |
100 |
|
| Long-term
loans and advances |
|
|
12 |
445 |
253 |
|
| Long-term
deposits and other receivables |
|
13 |
4,531 |
3,775 |
|
|
|
|
|
|
| Current Assets |
|
|
|
|
| Stores,
spares & loose tools |
|
|
14 |
20,281 |
17,531 |
|
| Stock-in-trade |
|
|
|
15 |
62,402 |
90,675 |
|
| Trade
debts- unsecured, considered good |
|
16 |
59,064 |
21,354 |
|
| Advances,
deposits and prepayments |
|
17 |
23,586 |
24,470 |
|
| Other
receivables |
|
|
18 |
27,889 |
25,057 |
|
| Short-term
investments |
|
|
19 |
56,840 |
61,190 |
|
| Bank balances |
|
|
|
20 |
27,545 |
3,676 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
277,607 |
243,953 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
403,763 |
379,900 |
|
|
|
|
========== |
========== |
|
|
|
|
| These
accounts should be read with the annexed notes. |
|
|
|
MUHAMMAD SIDDIQUE MEMON |
|
RAZAK H. M. BENGALI |
|
|
CHAIRMAN |
|
CHIEF EXECUTIVE |
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 1999 |
|
|
|
Note |
1999 |
1998 |
|
|
|
|
|
(Rupees in
'000') |
|
|
|
|
|
| Sales - net |
|
|
21 |
187,731 |
339,773 |
|
| Cost of sales |
|
|
22 |
128,510 |
238,202 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
|
59,221 |
101,571 |
|
|
|
|
|
| Operating
expenses |
|
|
|
|
| Administrative |
|
23 |
25,765 |
20,039 |
|
| Selling
and distribution |
|
24 |
9,707 |
6,681 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
35,472 |
26,720 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
66,099 |
32,501 |
|
|
|
|
| Other income |
|
25 |
4,064 |
3,338 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
70,163 |
35,839 |
|
|
|
|
|
| Financial
charges |
|
26 |
5,372 |
1,666 |
|
| Workers'
profit participation fund |
|
|
3,240 |
1,708 |
|
| Workers'
welfare fund |
|
|
16 |
139 |
|
|
|
|
------------------ |
------------------ |
|
|
|
8,628 |
3,513 |
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
61,535 |
32,326 |
|
|
|
|
| Provision
for taxation - current |
|
27 |
19,555 |
8,424 |
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
41,980 |
23,902 |
|
|
|
|
| Accumulated
profit brought forward |
|
|
58 |
46 |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
|
42,038 |
23,948 |
|
|
|
|
| Appropriations: |
|
|
|
|
| Transfer
to general reserve |
|
|
-- |
700 |
|
| Interim
dividend @ 15% (1998: Nil) |
|
|
17,393 |
-- |
|
| Proposed
final dividend @ 15% (1998: @ 20%) |
|
|
17,393 |
23,190 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
34,786 |
23,890 |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
profit carried forward |
|
|
7,252 |
58 |
|
|
|
|
|
|
========== |
========== |
|
| Earnings
per share in Basic and diluted |
|
29 |
3.62 |
2.06 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| These
accounts should be read with the annexed notes. |
|
|
|
MUHAMMAD SIDDIQUE MEMON |
|
RAZAK H. M. BENGALI |
|
|
CHAIRMAN |
|
CHIEF EXECUTIVE |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED 30 JUNE 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
(Rupees in '000') |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Profit
before taxation |
|
61,535 |
32,326 |
|
| Adjustments for: |
|
|
|
|
| Depreciation |
|
17,532 |
18,343 |
|
| Capital
work in progress written off |
|
561 |
-- |
|
| Provisions
for slow moving spares |
|
545 |
545 |
|
| Provisions
for doubtful receivables |
|
1,430 |
-- |
|
| Amortization
of deferred income |
|
(1,440) |
-- |
|
| Loss
on disposal of fixed assets |
|
45 |
259 |
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
80,208 |
51,473 |
|
|
|
|
| (Increase)/decrease
in current assets: |
|
|
| Stores,
spares and loose tools |
|
(3,295) |
(772) |
|
| Stock-in-trade |
|
28,273 |
(25,201) |
|
| Trade debts |
|
(39,140) |
25,020 |
|
| Advances,
deposits and prepayments |
|
(3,329) |
(776) |
|
| Other
receivables |
|
(2,832) |
(2,027) |
|
| Short
term investment |
|
4,000 |
(10,350) |
|
|
|
------------------ |
------------------ |
|
|
|
(16,323) |
(14,106) |
|
|
|
|
| Increase/(decrease)
in creditors, accrued and other liabilities |
|
23,682 |
(475) |
|
|
|
------- |
